Who can contribute to an HSA?
Contributions to an HSA for an eligible individual can be made by either the employer or the individual, or both. Contributions made by an individual can be made on a pre-tax basis through the individual’s employer, or can be claimed as an “above-the-line” deduction from income at the end of the year. If a contribution is made by the employer, it is not taxable to the employee (excluded from income). Contributions can also be made by others on behalf of an eligible individual and deducted by the eligible individual. All contributions are aggregated and subject to limitations.
How much can I contribute to an HSA?
The maximum contribution for 2007 is $2,850 for individuals or $5,650 for family coverage. These dollar limits will be adjusted for inflation each year and are based on a full year of participation in an HDHP.
Do contribution limits include both employer and employee contributions or can both parties contribute up to the limit separately?
Individual contribution limits are based on all contributions to the HSA from all sources combined.
Are “catch-up” contributions allowed?
Yes. For eligible individuals age 55 and older, additional “catch-up” contributions to HSAs are allowed as follows:
| 2007 - $800|
| 2008 - $900|
| 2009 and after - $1,000|
(The above amounts are pro-rated for periods of eligibility of less than a calendar year.)
Can individuals make their entire contribution to the HSA at the beginning of the year?
Individuals can contribute their entire contribution at the beginning of the year, up to the applicable contribution limit. They might, however, have to make a corrective distribution later in the year if the individual's eligibility status changes during the year. (e.g., become covered under another plan, HDHP coverage ends, change from family coverage to single coverage status, etc.).
When must HSA contributions stop?
HSA contributions must stop once an individual is entitled to Medicare benefits (generally age 65) or is no longer an eligible individual. However, if an individual reaches age 65 but does not enroll in Medicare, he or she may continue making contributions through the month that he or she enrolls in Medicare.
The above information does not constitute legal, tax or other benefit plan design advice. Anthem strongly encourages consultation with a tax advisor before establishing a Health Savings Account. Any Health Savings Account will be established between the individual account holder and the HSA custodian or trustee. Anthem is responsible for the administration of the health plan, and the custodian is responsible for the administration of the HSA.